Kier has been awarded an extension to its interim highway services contract by Birmingham City Council valued at £144m, continuing its work as the city seeks to procure an ‘alternative long-term solution' to replace the authority's scrapped private finance initiative (PFI) project.

Previously, the interim contract was between Kier and Birmingham's subcontractor, Birmingham Highways Limited, but this contract was novated to Birmingham City Council before it expired on 31 July.

The new contract started on 1 August and has an initial two-year run until 31 July 2028. This also allows for a possible nine-month extension until 30 April 2029.

Following the Department for Transport's (DfT) decision to withdraw support for ‘the continuing funding for the Authority's highways PFI project', Birmingham has announced it is looking to procure an alternative but added that ‘to enable the procurement of this alternative solution', it needs the interim service from Kier to continue and has opted to extend it.

Cllr Rob Grant, cabinet member for transport at Birmingham City Council, said: ‘The state of our roads is a top priority for residents and businesses across the city. If we want to live in safe and welcoming communities, and for the city to function, we need roads and pavements in good condition. We have a huge network of highways used by buses, cyclists, wheelers and pedestrians and people want to see that we are investing in them and looking after them. We take this responsibility seriously and continue to prioritise the safety and reliability of our highways network. I'd like to thank Kier for their ongoing support, expertise and commitment in ensuring continuity of service delivery.'

Barry Jupp, managing director for Highways at Kier Infrastructure, added: ‘We're delighted to secure this two-year extension with Birmingham City Council, which is a reflection of the strong partnership we've built together since 2020. Birmingham is one of the UK's largest road networks and we're proud to continue playing our part in keeping people and communities connected.'

A long road

The original contract between the city and Kier began in 2020, was originally expected to run until June 2021 and was reportedly valued at around £85m as the council sought to replace its 25-year agreement with Amey after it ended in a court case found in Birmingham's favour.

However, a further six-month extension was awarded to Kier in April 2021, as the initial contract allowed it to trigger the first extension option and to ‘consider further extensions in the future'.

In 2023, the DfT announced its plans to cease the existing funding arrangement. Birmingham challenged the decision through judicial review, but the department informed the city in March 2026 that it would ‘maintain its original position' and would not continue to fund its PFI contract.

Full details of the latest extension can be found here.